This week business and economics stalwart Terry McCrann discusses the real or not bubble in the property market and the state of interest rates

The home ownership dream is being pushed back for many Aussies.Source: Getty Images

THE great Australian dream of owning your own home outright is being overwhelmed by booming house prices and a growing army of property investors.

For the first time, the number of people who can enjoy having paid off their mortgage will become a minority in the coming year - outnumbered by renters and those still shelling out on their home loan.

High prices are scaring off potential buyers and those that do enter the property market are taking much longer to settle their debt than previous generations.

"Renters, facing such a high median house price are less able to afford the required deposit that is required to enter the housing market than they were back in the 1980s," he said.

Social analyst Mark McCrindle said the drop in outright ownership can be traced to the multiple housing phases the modern Australian family now goes through.

"Our parents, they generally bought a home, raised kids in the home and became empty nesters in the home. But that's not the case anymore," he said.

"The average Australian paying off a mortgage stays eight years per home."

Social analyst Mark McCrindle.Source: News Limited

Young couple Lisa Bushnell and Anthony Monteleone are reflective of the nation's new property reality, focusing on property investment rather than a house to live in.

Bushnell, 18, an accounting student from Belrose in Sydney, recently bought a modest unit in Terrigal on the NSW central coast with her barista boyfriend Monteleone, 24, from Narraweena, thanks to long-term savings plans and money saved by living with parents.

"We bought the unit as an investment property. We thought it was a good way to save our money and generate some wealth," Miss Bushnell said.

Their age makes them unusual however as Australians are taking longer to save for a deposit, meaning most won't repay their loan until later in life.

The median age of an Australian outright homeowner is now 66, according to NATSEM, up from 59 in 1988/89.

The median ages of a mortgage holder and private renter are 40 and 37 respectively while a generation ago they were 38 and 33.

"The population now has a higher average of the number of properties owned per person," said Paul O'Regan, Head of Home Loans at LJ Hooker.

"The majority of these loans are interest only, with the investor only really seeking to pay down the debt upon retirement, or when capital gains need to be realised upon."

In 1996/7, some 42 per cent of households owned their home without a mortgage. This proportion is now down to 31 per cent - less than one percentage point above renters - and it's likely that it will drop below renters before the next survey is released.

Miss Bushnell and her boyfriend plan on buying their own home in four to five years, but not before another investment property.

"We have aspirations of owning our home one day but for now investment is a good way to get our foot in the door."

A generation of housing change

Age of outright homeowner (median) in 2013 - 66

Age of outright homeowner (median) in 1988 - 59

Age of mortgage holder (median) in 2013 - 40

Age of mortgage holder (median) in 1988 - 38

Age of private renter (median) in 2013 - 37

Age of private renter (median) in 1988 - 33

Proportion of paycheck spent on mortgage in 2013 - 25%

Proportion of paycheck spent on mortgage in 1988 - 18%

Source: NATSEM analysis of ABS Survey of Income and Housing from 2011/12 and 1988/9.

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